March 31, 2016 – A new report, Powering the Savings, reveals that efficiency efforts are not keeping pace with growing electricity demand in California. The report calls for a new ‘pay-for-performance’ approach to unlock capital market investment, simplify the retrofit process and make it a more attractive option for building owners.

Details: Pay-for-performance programs set an energy-savings baseline for a building, and then provide payments for savings achieved beyond that target. This encourages building owners to deploy more substantial efficiency measures than they otherwise may have under traditional rebate or fixed incentive programs.

Reducing the energy demand from buildings can help California meet its greenhouse gas reduction goals, as electricity use in existing buildings accounts for 21 percent of the state’s emissions. Without reductions in this sector, the state will struggle to meet benchmarks set by the California Global Warming Solutions Act: rolling back emissions to 1990 levels by 2020, with an additional 40 percent reduction planned by 2030, and another 80 percent reduction by 2050.

California has relied on voluntary, largely self-financed efficiency measures, which have failed to achieve deep energy-use reductions, according to the report.